CEO, Strategic Advisor and Leading Expert on LEAN Startup for New Ventures and Enterprises

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I’m a businessman first and foremost and like all of us need a website that reflects my professional approach to my work. What I do struggle with is retaining a graphics or marketing agency to interpret my businesses into websites – the fees are scary and way out of my reach.

I discovered Strikingly.com through my involvement with the Aussie network in San Francisco and immediately realized this was a tool that I could use that would make me look like a total pro’. Literally within 30 minutes of trying Strikingly I had a website I could be proud of and I made it myself. Wow ! I was impressed.

Since I work on multiple projects concurrently I then created several more sites – yes I am a Pro Strikingly subscriber and I recently added a seventh site to my account. Each of the seven has a different look & feel which is something I also like.

So it’s fair to say I am a big Strikingly fan. Since I found I could make great sites, I have also introduced my customers to Strikingly and they too “saw the light”. No need to pay $5k, $10k, $20k+ for an agency to do this work. Spend some of that money on SEO/SEM to get your sites on page 1 of Google search results. I have done exactly that and achieved great search rankings.

If you are wondering whether you have the skills to use Strikingly, I would say that if you are a competent user of Powerpoint or Keynote and can design a decent proposal document you will have no issues using Strikingly to create and maintain a really great looking website. Given my confidence I am now reading Blogs that discuss techniques the professional web designers use and I’m gradually adopting those to make the sites even better. Being so closely involved in creating sites I have also developed an in-depth understanding of just how important SEO/SEM is and I am focusing on being able to master that aspect of website development.

In many ways your website really is just the tip of the iceberg and what you really need to spend your money on is the part of the iceberg you can’t see, the SEO/SEM work that is vital for your beautiful new website to be discovered. The Strikingly support pages do give lots of clear advice on how to ensure your site will rank highly.

I guess I should say that I am sure a professional design agency could improve on what I have designed, but…..the costs to achieve a modest improvement are just not justifiable in my mind. I don’t care whether you are a sole-trader or a global conglomerate, you should not spend company money on expensive design consultants if you can do a great job using your own time or with staff resources.

So, in summary I say, “go forth and create”, have no fear and have some fun as you admire your canny designs. Impress your friends, colleagues and customers.

The Thomas L. Friedman story that appeared recently in the New York Times and was syndicated globally describes a kind of new world order created by massive growth in Internet data (Internet of Things) and what I have called “The Software Century” in my article published here http://anthillonline.com/why-is-this-the-software-century/

Friedman was riveted by MIT’s Erik Brynjolfsson and Andrew McAfee’s fascinating new book, “The Second Machine Age”. Brynjolfsson and McAfee have painted a rather sobering picture of a world where the pace of change continually builds thanks to The Software Century and The Internet of Things. Basically where real-time sensor data is accessible by software in The Cloud in order to make many of the decisions that people, white-collar workers in particular, are now paid handsomely to make.

The drivers of this unstoppable change to society as we know it are the combination of Globalization, The Software Century, The Internet of Things, Mobile Devices and of course Ubiquitous Internet powering the insatiable demands of Western corporations for greater returns to shareholders, online consumers and by Governments everywhere that have all but given up on balancing their budgets.

The term “Second Machine Age’ is indeed a very apt one, describing an environment that has been portrayed in numerous science fiction worlds by writers such as Philip K. Dick and Isaac Asimov.

While it verges on a kind of doomsday scenario “The Second Machine Age” shouldn’t be dismissed as the musings of a couple of eccentric MIT Professors. The book accurately assesses the nature of the changes that we will all experience and focuses on the impact on the traditional white-collar workforce.

The potential for genuine social upheaval is clearly upon us and the pace of the changes driving us all toward a new world order will not diminish. Moores Law has never been more relevant particularly when applied to the volume of data washing through the pipes of the Internet.

Maybe it isn’t quite time for our Governments to look for a panic button but let’s not make the mistake of simply hoping all will be fine and assuring each other “these changes aren’t that serious, no need to worry”.

The scariest fact is that none of us can stop the explosive growth in sensor data and with a ubiquitous Internet and increasingly sophisticated software environment The Second Machine Age is literally right around the corner.

What this all means for our kids as we try and help them plan their careers needs some serious analysis. Even more critical however is what it means for the millions of people currently employed to assess information and make decisions, the vast army of white-collar employees. The Second Machine Age essentially predicts that 80% of those people are very likely to be redundant.

My recent story on start-up incubators certainly generated some lively discussion and a large number of emails from people outlining their less-than-ideal experiences.

Mostly their accounts exposed a really troubling issue. Some start-up founders told me they were entering into agreements with their incubator/accelerator to pay very substantial sums of money and giving up quite high percentages of their company in return for a place in the program, and the development of a website.

The people who contacted me with these types of agreements were mostly very aggrieved with what was delivered, were self-critical that they naively agreed to the deals and were now locked into onerous and binding contracts. Some said they were legally obliged to pay more than $100,000 as part of their deal.

Their experiences prompted me to develop a basic checklist to help founders and entrepreneurs do a fundamental assessment of what they are being offered. It should help you to determine when to be wary of what I would generally term an exploitative offer.

But first some clarification on the differences between start-up accelerators and incubators. The terms are often used interchangeably, but incubators and accelerators are not the same.

The US National Business Incubator Association defines an incubator as a “business support process” that promotes the successful development of fledgling companies through resources and services from the incubator and its contacts. They don’t generally have a limit on the time a business can spend in the program and graduation can occur any time from about six to 48 months.

Incubators are more likely to prefer an existing business that wants to grow and develop over time, with “graduation” from the program taking up to 4 years.. They will often charge a monthly fee for their package of services and don’t usually seek an equity position.

Accelerators aim for the same overall goal of helping to improve the odds of success for start-ups, but unlike the incubator, accelerators generally make an investment in the companies enrolled in their programs. Accelerator programs are designed to be concise and generally take three to four months to complete, culminating in a “pitch” or “demo day”.

Both offer packages of office space, facilities, mentoring, business networks and VC connections.

Three dead giveaways

There are three very important tests to conduct when you are assessing your options. An incubator or accelerator failing any one of these should raise a red flag, indicating you should proceed with extreme caution and, at an absolute minimum, seek objective third-party advice before signing binding agreements.

1. The incubator/accelerator proposes a turnkey solution, including building you a sophisticated website or other using in-house services and charging thousands of dollars.

An incubator where the business model is to use their in-house “dev” team for a fee and/or equity has, in my opinion, a clear conflict of interest.

Ethical incubators/accelerators focus on getting you established with minimal cost and that would rarely involve using expensive in-house developers.

A related warning sign is a complex and one-sided contract that contains clauses binding you to an accelerator well beyond the formal program period.

2. The program’s advisors don’t have a discernible track record of success working with start-ups.

One of the truly critical means to a successful outcome is the quality of the management team, including the board, chief executive, chief operating officers, advisors and mentors. You absolutely must do careful and detailed due diligence on them.

Whether the incubator has a cool office in a great location is largely irrelevant, it’s the team that is critical. Each of these people has a very important role to play in getting you to a point where your business is operational and looks like an attractive investment opportunity.

3. The program’s claimed successes are not that successful.

While you might think this is an absolute no-brainer, I list it because once again there is no substitute for a thorough due diligence.

It might take time, even weeks, but you simply have to talk to as many of the past graduates of the program as you can and not just talk to those the program offers up.

If the program you are considering has graduated 40 or 50 businesses, then plan to talk to 80 per cent of them. Don’t shortcut this aspect of your due diligence: feedback may range from ecstatic satisfaction to “I’m taking legal action”. Please do not think that talking to a handful of past graduates is enough to verify the program’s claims.

A final consideration is to be alert to the program that has one objective: to extract the maximum amount of funds and equity from you.

Reputable programs, and there are many, focus on working to qualify the potential of your idea and getting you to an investment-ready status as quickly and with as little cost as possible.

Unfortunately it is very much a case of caveat emptor when it comes to signing a contract with an accelerator or incubator.

Don’t sign agreements until you have done your due diligence. A formal legal opinion may well cost a few thousand dollars but that is petty cash compared to signing an exploitative contract.

It’s also a good idea to firstly decide whether you really do need to approach either an incubator or accelerator. If you have a killer idea that you truly believe has the potential to become a business, there is a growing number of services designed to quickly help you do basic testing and determine whether you really do have something worthy of investment.

A good example is Javelin that can help you confirm if your idea can find a market. QuickMVP and Javelin’s Experiment Board are super useful for start-ups and more mature businesses. If you use either or both of these you’ll be in a much better position to pitch to investors.

Greg Twemlow is a Sydney-based business consultant. Follow him on Twitter.

News about Aussie tech start-ups succeeding here and then overseas may suggest a thriving incubator scene. The reality for most of our the majority of Australian incubator participants is very different, argues Sydney start-up business consultant Greg Twemlow.

Australia has a seemingly vibrant tech incubator ecosystem where budding entrepreneurs can find basic funds, advice, like-minded co-located buddies and free rent from a number of initiatives.

But these unregulated schemes and their results vary and without major changes, Aussie incubators will struggle to deliver the successes enjoyed by Silicon Valley incubators.

My most recent trip in May to San Francisco has reinforced my views about the performance of Australia’s tech incubator industry.

Unlike California, Singapore and the UK, Australia has allowed tech incubators to proliferate without any substantive level of control, co-ordination and guidance from our federal government and the venture capital community. As a result, a majority of start-ups camped in incubators could be wasting their time and facing a significant opportunity cost.

As a business consultant I frequently see that start-ups are putting too much faith in incubator programs when they should instead be entirely focused on building their product, relationships and market understanding.

At the same time, Australia lacks some of the characteristics possessed by other economies – characteristics that are crucial for start-ups to thrive.

In Silicon Valley and now in other large US cities such as New York, Seattle, Austin and Miami, in Singapore and in the UK, the model is of the utmost simplicity: brains attracts risk capital and risk capital attracts brains.

While Australia does not lack brains, it does lack risk capital and start-up skills, and that’s a major impediment to making the Silicon Valley incubator model work here.

In splitting my time between Sydney and San Francisco, I’ve identified a lack of capital for mid and late-stage start-ups as a major hurdle for young Aussie companies that have managed to secure incubator or angel investment.

It’s no coincidence that fast-growing tech firms relocate to Silicon Valley and increasingly Singapore for a better start in life.

I liken the start-up funding situation in Australia to a drip-feed system that should run for a year but dries up after three months. There’s just nowhere to go after the early support stage.

By contrast in the US, pension funds are major investors in venture capital funds that seek out start-ups in America’s tech incubator hubs, meaning start-ups have ready access to the capital they need just as they begin to grow rapidly.

A 2013 PricewaterhouseCoopers report identified that Australia’s economic and social climate seems to show a much higher sensitivity to failure than business cultures in North America.

This combination of a higher fear of failure and higher consequences of failure are toxic to the start-up scene. It could also be the reason so many of our entrepreneurs are putting their faith in incubator programs rather than garnering the courage to tough it out by getting direct access to the skills and experiences most relevant to their ideas.

Other commentators have argued that the risk of failure is a bigger hurdle to overcome for Australian entrepreneurs than for those in competitor economies.

Without regulation of its incubator programs, Australia runs the risk of unethical exploitation. In the past few years we have seen slick operators making grand promises and giving what amounts to false hope.

Start-up CEOs should be especially wary of fee-based operators promoting fast-track processes. These incubator programs offer training and packages to supposedly enable start-ups to ”graduate” their programs and embark on a journey to success – in return for fees and a sizeable chunk of equity.

The reality is regularly that of time and money down the drain. Budding entrepreneurs are best advised to maintain a healthy scepticism of incubator training schemes. Their programs have a great way of keeping participants busy without progressing with the real work of building their product and finding a market.

Despite their patchy track record, Australian business incubator programs are booming. Our federal, state and some local governments are running programs. Universities and large telcos have started incubators. Fortune 50 companies have launched incubators and venture funds. Successful entrepreneurs have opened programs of their own; high-net-worth families are scouting around to invest in tech; angel investors are active with modest investments and capital boards like the Australian Small Scale Offerings Board work hard to find funding for start-ups.

But only a handful of these programs is established enough to have valuable experience or be able to point to consistent past successes. Would-be participants in an incubator are strongly advised to speak to past ”graduates” of the program. Make a point of asking what their experience was of the scheme and whether it had any positive impact.

Australia does have effective start-up incubators, such as the pioneering Australian Technology Park in Sydney, recently awarded a major gong by the international incubator industry.

Yet not all incubator experiences are as worthwhile when it comes to moving start-up founders closer to building a successful company. Many incubators are very good at renting out real estate and keeping people busy, while taking them away from the essential work of product development, market testing and securing foundation customers.

It’s certainly possible to make a successful start-up happen in Australia. The absolute cream of Aussie start-up ideas will probably manage to find support here or more likely offshore.

Budding entrepreneurs are advised to be wary of false prophets as they work to realise their dream. While start-ups are almost universally funds poor, an even more valuable commodity is time and unlike funding, wasted time is a resource that can rarely be recovered.

This article was written by Grace Ng of Javelin. She is one VERY smart lady and LEAN is a total no-brainer for startups. Do NOT waste your time and money on your brilliant idea until you test all your assumptions.

-Greg Twemlow

Four years ago, 50 bright-eyed wanna-be entrepreneurs sat in a room overlooking a deserted cobblestone sidewalk in New York’s Financial District. It was a Saturday afternoon and their minds were brimming with crazy ideas for new business ventures. They came to this business workshop expecting to build out their ideas. As they entertained all the possibilities, the workshop mentors started shouting, “Get out of the building!”

We wanted to force these wanna-be innovators to get out onto the street, interview strangers and validate demand. Did their big ideas solve for real customer problems? This was the first Lean Startup Machine workshop, and our goal was to teach entrepreneurs Lean Startup thinking in just three days. Eric Ries told us this wasn’t possible.

For my co-founders and I at Javelin, our question has been the same from the beginning. How do we turn people’s deeply-ingrained execution mindsets to ones that constantly question assumptions and explore possibilities in environments of rapid change and uncertainty? What’s the most effective way to do this? It’s a complete paradigm shift, but one we think is necessary for building 21st century businesses and solving 21stcentury problems.Today, we’ve taught the process to over 50,000 entrepreneurs around the world, entrepreneurs who have gone on to launch products and services that thrive on rapid cycles of experimentation. They’ve gone to implement Lean Startup thinking at their jobs and launch new products that thrive on rapid cycles of experimentation.

The tool that enables us to teach Lean Startup at scale is theExperiment Board. We’ve developed it through rounds of learning from the most successful entrepreneurs we’ve seen come out of Lean Startup Machine.

Effective Experiments are Hard to Design

Every experiment starts with a hypothesis. You want to test the validity of your assumptions. But few of us know how to formulate truly test-able hypotheses! Very few of us understand how to identify and test our really risky ideas and assumptions.

The Experiment Board is a tool we use to help others easily turn business, product, or feature ideas into experiments. We created it to eliminate (ok, minimize) the most common mistakes teams run into when conducting experiments for product and service validation.What the Experiment Board does is lay out the components of an effective experiment and help teams communicate and collaborate with their team members and stakeholders. Teams who use it gain alignment and make faster decisions as a result.

Common Challenges in Product Validation Experiments

Getting Buy-In

“Why do we have to validate this? We know people want this feature. Let’s just build it!”

Sound familiar? If your workplace culture discourages experimentation, the mere suggestion that your company validate the need for new products or features will prompt looks of horror from individuals in leadership positions. For people who are used to operating on gut instincts, the need to fact check their intuition is a barrier to getting buy-in. Especially as someone who’s been on the job for years, or even promoted for their intuition, it’s uncomfortable to have years of experience suddenly challenged. The know-it-all trap is easy to fall into, and it takes self-awareness to acknowledge that times have changed. What worked yesterday, does not work today.

One way to get buy-in is to provide your team members with what they need, but go ahead and still run the experiment on the side, showing them the results later. Involve one or two team members in designing your validation experiment so you have as much alignment as possible on what you’re actually testing, but run the test!

Structuring Effective Hypotheses

Once bought-in, many teams find themselves stumped as to how to actually structure their experiments.

To design an effective experiment, start with a hypothesis, a prediction for what you think will happen. (This can be phrased as a customer-problem hypothesis or a problem-solution hypothesis). The customer-problem hypothesis tests if your intended customer, or user, experiences the problem you think they have. The problem-solution tests if your proposed solution addresses that problem with a quantifiable outcome. Ideally, start with the customer-problem hypothesis, so you’re not assuming anything by jumping into the solution too soon.

Start by asking two questions: What problem does this solution solve and who has this problem? Identify who the customer or user of your proposed solution is. Next, brainstorm potential problems your customer could have that calls for your proposed solution. Make sure you timebox each brainstorm session and have each team member individually write on sticky notes to contribute. (This ensures that everyone’s opinions are heard and enables faster decision-making). Once you’ve selected your customer and problem to test, you’ve formed your hypothesis.

To define a problem-solution hypothesis, simply state that your solution will solve the problem for that specific customer. You’ll need to quantify the outcome you expect to see that will prove the problem is solved. (We’ll go over how to set a quantified outcome in a bit).

The right side of the Experiment Board tracks the progress of your experiments, so you can stick your hypothesis into the respective boxes to indicate the start of the experiment and keep everyone aligned and what you’re testing. This exercise is a collaborative and simple way to get your team engaged in running experiments.

Identifying the Biggest Risks in the Idea

After forming your hypothesis, it’s time to identify your riskiest assumption. This is where most teams get tripped up. Assumptions are beliefs that are core to the viability of your hypothesis. Think of assumptions as the behavior, mentality, or action, that needs to be true in order for the hypothesis to hold true. Your riskiest assumption is the one that is both core to the product or service’s viability andmost unknown, meaning you have little data to prove it’s valid. When you’re testing a customer-problem hypothesis, your riskiest assumption is one that supports the belief that your customer has that problem. In a problem-solution hypothesis, the riskiest assumption is if it’s the right solution to solve the problem. It’s important to always test your riskiest assumption first.

On the Experiment Board, brainstorm all the possible assumptions you’ll want to test, then identify the riskiest assumption to test. Involve everyone on your team (and a few people who are totally unfamiliar with your project) in brainstorming assumptions. Why include “strangers” in your project? These people are less prone to what we call confirmation bias. If you’re intimately involved with the project, there’s no way around this.

Once you have a few assumptions, ask your team members to dot vote on post-its to select the assumption they think is the riskiest to test. Your experiment will test if the riskiest assumption is valid or invalid. If it’s valid, then your hypothesis holds true. If it’s invalid, you’ll need to change your strategy by changing one or both elements in your hypothesis. This is called a pivot. The goal is to get closer and closer to something that holds true. The Experiment Board helps you track pivots, which communicates your validated learning and progress to stakeholders over time.

Staying Accountable to the Results

Defining what success should look like is the most crucial step before conducting an experiment. Many teams want to just build and see what happens. The problem is, without setting a success criterion, all the positive results you see will look like validation. After spending six months on a project, what does one paying customer really tell you? Is it really worth your time to allocate more resources and keep building? Or is there not enough interest to spend more money on it? The results you see after running an experiment are subjective. You might think you have enough validation to put more budget behind it, and another person will disagree.

The minimum success criterion is the weakest outcome you expect to see in order to take on more risk and continue. Without defining success up front, teams will argue over whether an experiment was successful or not; it is impossible to interpret the results of the experiment without succumbing to some form of bias. Make your experiments measurable!

Running Quick, Iterative experiments

A common misconception is that the only way to test an idea is by building it so customers have something to interact with. But there are many, surprisingly counterintuitive ways to test customer demand without building anything. The most insightful, low-cost ways include conducting interviews, setting up a landing page test, or delivering the service manually (aka concierge). The technique you choose depends on the assumption you’re testing, the time you have, and how much certainty you have about the direction you’re going in. These quick, low-cost ways to test your assumption will reduce the time it takes to get customer feedback.

How We Validated the Need for the Experiment Board

Before we created the Experiment Board, we found that teams too often spun their wheels, argued indecisively, and wasted time struggling to understand what and how to test. When we tested the Experiment Board tool in our workshops, teams began running their first experiments within 10 minutes. Simple things like using stickies and timeboxing enabled communication, alignment, and faster decision-making. The flow of the board design gave teams a tangible sense that they were making progress.Our hypothesis in designing the Experiment Board was that by increasing the speed at which teams can set up and conduct experiments, the sooner they would discover viable ideas for products and services people will use and buy.

Many teams often discover that their customers didn’t experience the problem badly enough to use or pay for a solution. They often abandon their ideas completely after three pivots in favor of an actual problem they find during their fourth round of experimentation. The most successful teams often pivoted multiple times until they found a key insight leading them to a bigger opportunity. This all takes place within 24 hours of designing and running experiments with actual people! Crazy, right? But it works.